Should I use a credit card or debit card for online purchases?
Why credit cards are usually safer
Credit cards come with legal protections like the Fair Credit Billing Act, which limits your liability for unauthorized charges to $50 and lets you dispute charges for goods not received or not as described. Debit cards fall under the Electronic Fund Transfer Act, which also limits liability but requires you to report the loss within two business days to cap it at $50; waiting longer can increase your liability to $500 or more.
With a credit card, the money isn't taken directly from your bank account, so you're not out cash while a dispute is resolved. With a debit card, the funds are typically frozen and you may wait weeks to get them back.
When a debit card might be okay
If you have a strong relationship with your bank and monitor your account daily, a debit card can work for small, trusted purchases. Some banks offer zero-liability policies for debit cards, but these are voluntary and may not cover all situations.
Using a debit card can also help you avoid debt if you tend to overspend. However, for large or unfamiliar online merchants, a credit card is still the safer choice.
- Credit cards: $50 max liability for fraud, strong dispute rights.
- Debit cards: $50 liability if reported within 2 days; up to $500 or more if delayed.
- Credit cards don't drain your checking account during a dispute.
- Some banks offer zero-liability debit cards, but check the terms.
- Use virtual card numbers for extra security with either type.
Common mistakes
- Thinking debit cards offer the same legal protections as credit cards—they don't.
- Assuming you can't dispute a debit card charge; you can, but the process is less favorable.
- Using a debit card for large online purchases from unfamiliar sellers, risking your rent money.
